Car Finance

As we head into the biggest month of the year for new-car sales it's not always easy to pick the real deals.

BMW's car financing arm has been ordered to engage an independent expert to review its procedures, and been slugged with its second fine in 12 months

I purchased a 2014 Renault Kangoo converted for special needs of my child and would like to know how stamp duties are calculated. Are they based on the final price of the converted vehicle or original price of the Renault before the conversion was made?

To provide greater clarity for the retail price of motor vehicles could the industry delete the on-road costs and include it in the full price of the car? I suspect car companies use the on-roads to lower the price of their cars to the consuming public. The end result is you actually pay more than the advertised price.

I am self-employed and want to buy a car on finance. I don't want to lease it. Could I claim the loan on my tax?

The biggest talking point surrounds changes the government has made to existing accelerated depreciation rules. Under the new scheme, eligible businesses with an annual turnover of under $2 million are able to claim an immediate tax deduction on items purchased that are valued up to $20,000 inc GST.Previously, the maximum for this scheme was set at $1,000, so it’s a big jump. Any purchases over that threshold had to be claimed as deductions over a number of years.Tools for tradesmen or coffee machines for cafes have been suggested as examples of using the accelerated depreciation changes, but you can also use the small business incentive to buy a new or used car.When does it come into effect?The incentive is available now, having started on Budget Night 2015 (Tuesday, 12th May) and will run up until 30 June 2017, should everything go to plan.Some experts have suggested that consumers should wait until the scheme passes through Parliament before taking advantage, but it appears unlikely to be overturned. It should also be noted that the ATO will be keeping a close eye on ABN applications, for those wishing to exploit the new scheme.So, how does the small business tax break help to get you a new car?First up, you need to be running an eligible small business with an annual turnover of less than $2 million.  If so, you can start looking at cars under $20,000 inc GST. Only purchases under the $20,000 inc GST limit will be eligible for accelerated depreciation.Depending on your particular circumstances, you may then be able to claim a deduction up to the full purchase price of the vehicle in the year of purchase.What type of car can you buy?Businesses have the option of purchasing a new or used vehicle that will be used for commercial purposes.Don’t be surprised if new car manufacturers start offering sub-$20,000 deals in order to tempt buyers into a purchase.What about cars over $20,000?If you’re looking at a car over $20,000 it can still be deducted, but would not qualify for accelerated depreciation.These purchases would be subject to existing deprecation rules as per the relevant tax law.Financing your purchase to utilise the small business tax breakSo, you’re a small business owner and you’ve got a car under $20,000 in mind. The only thing missing is the finance required to complete the purchase.The good news is that the small business tax break remains whether you're purchasing the vehicle through finance or not. That means you can go to a finance company, work out the appropriate package for you, and be enjoying your new car sooner.It is important to consult with your tax agent/tax advisor to ensure the loan facility you are considering entitles you to take advantage of the accelerated depreciation scheme.An important aspect to note, as always, is to organise your finance before selecting your car, which will give you a better idea of your budget.Key takeaways•Be an eligible small business with under $2 million in annual turnover•Choose a vehicle under $20,000 inc GST to ensure you maximise your tax deduction•Organise finance before shopping to clarify your budgetThis page is intended to provide you with general information relating to changes made in the 2015 Annual Federal Budget with reference to accelerated depreciation.You should always consult your tax advisor prior to making any decisions on purchasing a vehicle for your business and using such schemes. We accept no liability for any reliance placed on the information provided on this page. Article credit: firstratecarloans.com.au

There may be many reasons that you fear rejection from a lender or broker. This might be bad credit in the past, the fact you’re applying for credit for the first time, you’re self-employed or you’re a non-Australian resident. Don’t fret - here are our Top 5 tips to get car finance in 2015.If you’re approaching a broker or lender for a car loan, even if you intending to borrow up to 100% of the car’s value, showing you are paying off existing debts or saving goes a long way to gaining approval. This demonstrates that your financial situation is stable. It shows lenders you have disposable income to spend on car finance, plus all the other extras cars need; fuel, insurance and maintenance. A lender might reject you off the bat if you’re asking too much. Remember, buying a car isn’t just a matter of handing over an amount equal to the ticket price. You have to consider stamp duty, insurance, registration and all the other little costs that add up. If you don’t budget well, lenders might think you’re an irresponsible borrower.Sometimes to gain approval you might have to opt for a secured loan. Secured loans place your car as collateral or security. The risk to you is that the lender will repossess your car if you default on the loan. If you’re a first-time borrower or a new arrival, you might have to find someone to guarantee the loan on your behalf. This gives lenders peace of mind when they agree to lend to you. The internet is great for researching all the different loan products and options out there. Get as much information as you can, but don’t apply. An application means a lender or broker goes so far to do a credit check. These show up on your credit history and can often cause trouble if you’re rejected more than once or twice. When making enquiries to lenders, say you don’t want them to check your credit history until you’re certain.Your credit history is often the biggest factor in determining whether you get your car loan approved. Sometimes, credit histories often contain mistakes. According to ASIC’s MoneySmart, creditors may incorrectly report defaults, fail to notify you of outstanding debts or plain forget to update their records. This leaves a black mark on your credit history that hampers your ability to gain approval. You can obtain your credit history through a credit-reporting agency. It’s your responsibility to fix any mistakes. Find out more at the MoneySmart website.Article credit: Savvy

Today we've launched a new section of carsguide.com.au designed especially for anyone seeking information and advice about car finance.Incorporating a range of interactive tools and editorial content, the newly developed section is a reliable resource for when you next research your car financing options.The new finance section includes: • Information and advice about car loans, leases and other types of finance.• Interactive tools and calculators including loan and lease calculators, interest rate comparison table and a car trade-in valuer.• You can submit questions to be answered by industry professionals.Providing specific tools like car loan repayment calculators and information on additional costs to plan for, we aim to give you the tools and unbiased, accurate information you need throughout the car buying process.“Buying a car is a major financial decision for consumers, yet research found for some it can be more influenced by the emotion of the car itself than that amount consumers can afford, putting consumers at risk of spending above their means,” says carsguide.com.au chief executive officer, Ed Smith.“With 35% of consumers planning to buy a car over $40,000 on their next car purchase this is a significant cost that requires planning and research on the consumer’s behalf.”“We asked users what they were looking for in terms of information and advice about financing options and have tailored the section accordingly. People want trustworthy and unbiased information about borrowing options and how to fund their next car purchase, so the main focus for our section is to provide a resource for people to research and calculate the best loan option for them.”“Our finance section further extends on our commitment to being Australia’s most comprehensive digital automotive publisher.”

Considering a car lease but want more information? Read about different car leasing options include novated leases, residuals.